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Apublic limited company (legally abbreviated to PLCorplc) is a type of public company under United Kingdom company law, some Commonwealth jurisdictions, and the Republic of Ireland. It is a limited liability company whose shares may be freely sold and traded to the public (although a PLC may also be privately held, often by another PLC), with a minimum share capital of £50,000 and usually with the letters PLC after its name.[1] Similar companies in the United States are called publicly traded companies.
A PLC can be either an unlisted or listed company on the stock exchanges. In the United Kingdom, a public limited company usually must include the words "public limited company" or the abbreviation "PLC" or "plc" at the end and as part of the legal company name. Welsh companies may instead choose to end their names with ccc, an abbreviation for cwmni cyfyngedig cyhoeddus.[2] However, some public limited companies (mostly nationalised concerns) incorporated under special legislation are exempted from bearing any of the identifying suffixes.[3] The term "public limited company" and the "PLC"/"plc" suffix were introduced in 1981; prior to this, all limited companies bore the suffix "Limited" ("Ltd."), which is still used by private limited companies.[4]
When a new company incorporates in England and Wales or in Scotland, it must register with Companies House, an executive agency of the Department for Business and Trade. Prior to October 2009, companies in Northern Ireland were registered with the Northern Ireland Executive's Department of Enterprise, Trade and Investment, but since then Northern Irish company registrations, as with those of the rest of the United Kingdom, have been handled by Companies House.
Formation of a public limited company requires a minimum of two directors and one secretary (differing from country to country: in India three directors are required). In general terms anyone can be a company director, provided they are not disqualified on one of the following grounds:
The members must agree to take some, or all, of the shares when the company is registered. The memorandum of association must show the names of the people who have agreed to take shares and the number of shares each will take. These people are called the subscribers.
There is a minimum share capital for public limited companies: before it can start business, it must have allotted shares to the value of at least £50,000. A quarter of them, £12,500, must be paid up. Each allotted share must be paid up to at least one quarter of its nominal value together with the whole of any premium.
A company can increase its authorised share capital by passing an ordinary resolution (unless its articles of association require a special or extraordinary resolution). A copy of the resolution – and notice of the increase on Form 123 – must reach Companies House within 15 days of being passed. No fee is payable to Companies House.
A company can decrease its authorised share capital by passing an ordinary resolution to cancel shares which have not been taken or agreed to be taken by any person. Notice of the cancellation, on Form 122, must reach Companies House within one month. No fee is payable to Companies House.
A company may have as many different types of shares as it wishes, all with different conditions attached to them. Generally, share types are divided into the following categories:
Bearer shares are no longer possible, as they were abolished in the UK by the Small Business, Enterprise and Employment Act 2015. Any existing bearer shares had to be converted to registered shares before February 2016, or face cancellation.
A PLC has access to capital markets and can offer its shares for sale to the public through a recognised stock exchange. It can also issue advertisements offering any of its securities for sale to the public. In contrast, a private company may not offer to the public any shares in itself.
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The following documents, together with the registration fee are sent to the Registrar of Companies:
The key difference with the paper process is that there is no Form 12 and requirement for a statutory declaration. This significantly speeds the process: the record at Companies House for the formation of an Electronic Company is 23 minutes.
Because the electronic process requires compatible software that works with Companies House eFiling service,[6] companies are usually formed through a Company Formation Agent.[7]
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Every company must deliver an annual return to Companies House at least once every twelve months. It has 28 days from the date to which the return is made up to do this. Failure to file a return is a criminal offence, for which the officers of the company may be fined.[8]
There is an annual document-processing fee of £40 if filed by paper (or £13 for users of the Electronic Filing or WebFilings services), which must be sent to Companies House with the annual return.
Both a private company limited by shares and an unlimited company with a share capital may re-register as a plc, but a company without a share capital cannot do so.
A private company must pass a special resolution that it be so re-registered and deliver a copy of the resolution together with an application form to the Registrar. The resolution must also:
If it does not already have sufficient share capital, the company must issue £50,000 in shares a minimum of 25% part paid.[9]
The basic distinction between private and public companies is retained. Private ones will continue to incorporate the word 'Limited' (or 'Ltd') in their name, while public ones will incorporate the new words 'Public Limited Company' (or 'plc').
